Universal Credit: who are the losers?

Ian Duncan Smith’s speech on Universal Credit (UC) is now available on the DWP website. It claims that:

some 2.5 million households will get higher entitlements as a result of the move to Universal Credit.

The big question for me is who are the losers?

We will have to wait to see the detail of the White Paper before this question can be answered. Richard has already pointed out that new rules on harship payments will mean significant losses for some families with children. And there are many other potential losers. If, for example, the Government’s plans involve integrating Tax Credits into UC, then many working families on median incomes or above will be about to see very sharp reductions in their entitlements. If proposals involve integrating benefits that are currently universal, such as Carer’s Allowance, then means testing will mean that many carers lose their entitlement. And if plans involve sanctions for people who are currently in work – requiring them to increase their hours or lose their entitlements – those who can’t find more work will face significant cuts. Despite this morning’s spin, if cuts like these are coming it will be difficult for the Government to claim that everyone gains.

Written by Nicola Smith

I’m Head of the Economic and Social Affairs Department at the TUC. I also represent the TUC on the Social Security Advisory Committee. My posts may therefore range from the environment to the welfare state via macro-economic policy but will inevit…

I am afraid I don’t have any details on this at the moment – but it looks as if the direction of travel is to award more benefits on a household basis, which would mean that adults living in the same household would have a joint entitlement. Further details will become available as legislation to enact the White Paper appears.

Is the government making all these cuts to the housing benefit system now, so local authorities get the blame? Then suddenly when the remote and power hungry DWP take control they can say how wonderful Universal Credit is – Not like that horrid housing benefit scheme! DWP administration of Housing Benefit is going to be a nightmare. Housing Benefit should remain seperate and be dealt with locally. I thought the coalition were all for localism?